With nearly 90 billions U.S. dollars worth of financial services trade surplus, the United Kingdom is one of the most important financials hubs globally. This makes the UK also one of the
- which broadly refers to capital invested into companies not listed on the stock exchange (not publicly traded) - industries worlwide. The UK has the
in Europe and it is a sought-after destination for international private equity investment flows
. In the
, however, North America, and the United States in particular, remains by far the largest market.
PE investment flows: sources and targets
The leading position of the UK as one of the main hubs for financial services worldwide is thanks to the city London: The British capital attracts and manages huge amounts of the global capital flows. This reflects in the country's private equity market: London attracted
nearly half of all private equity investments in the UK in 2022. Private equity investment inflows in the UK
come from all over the world, with capital from firms located in North America being the main source of PE funding and accounting for approximately 30 percent of the total. When looking at the target companies, the ICT (information and communication technology) sector appears to be the
most popular for PE investments in the UK. In fact, the ICT sector is one of the most dynamic industries in terms of innovation and one with the highest growth potential.
Leading PE firms
While the U.S. represents by far the largest market for private equity investments worldwide, and it is also home to the
biggest PE firms worldwide, the UK, and particularly the city of London, has become the European hub for PE. According to a ranking based on PE fundraising capacity in the last five years, five out of the ten
leading private equity firms in Europe are located in London. Apart from the importance of large funds who manage assets and investments,
private equity as a broader impact on economies: It is estimated that private equity-backed businesses generated 286 billion British pounds in GDP in 2023 in the UK, accounting for six percent of the country's total.
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